The increasing prevalence of obesity and co-morbidities such as type II diabetes poses a significant health problem worldwide. Understanding the cellular signaling pathways underlying these pathological states is critical to assist in developing potential therapeutic treatment of these conditions. Leptin is a hormone secreted by fat, which acts on neurons in the central nervous system (CNS) to regulate food intake and energy expenditure. Leptin initiates an intracellular signaling cascade which in turn leads to changes in ion channel activity and gene expression that ultimately keep energy balance in check. The leptin signaling pathway is tightly controlled by tyrosine phosphorylation, and two protein tyrosine phosphatases (PTPs) have recently been implicated in regulation of the leptin signaling pathway in the brain: PTP1B and SHP2. These PTPs clearly have important in vivo roles in regulating energy balance, but the precise neuronal site(s) of action and the mechanism of PTP1B/SHP2 action at a cellular level are unknown. POMC and AgRP neurons in the hypothalamus are an important site of both energy balance and glucose homeostasis regulation. We hypothesize that PTP1B and SHP2 have important metabolic roles specifically in these neurons via either leptin-dependent or - independent effects. Our specific aims will address the effects of PTP1B or SHP2 deletion specifically in POMC- or AgRP-expressing neurons of mice on body weight, adiposity, leptin sensitivity, and glucose tolerance. Furthermore, these studies will address how PTP1B or SHP2 deletion in hypothalamic neurons affects the electrophysiological properties of these neurons. This combination of genetic, biochemical, and electrophysiological techniques will provide essential information about the cellular mechanism of PTP action in hypothalamic neurons as relates to energy balance.